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The settlement of a class action lawsuit against Yahoo may result in lower pay-per-click revenue for parked domain names.

The lawsuit was brought against Yahoo for allegedly misleading advertisers as to the sites where their ads would appear:

This class action was brought in 2006 by several Yahoo! pay-per-click search advertising customers. They allege that customers contracted for targeted ad placements through two products, “Sponsored Search” and “Content Match” (and predecessor products provided by Overture Services, Inc. and GoTo.com, Inc.) and that Yahoo! breached its contract with its customers by allowing Yahoo! ads to be displayed in spyware, domain name parking sites (also known as bulk registration sites), pop-ups, pop-unders, and typosquatting sites. Plaintiffs brought claims for breach of contract, unjust enrichment, misrepresentation, civil conspiracy, and unfair business practices.

As part of the settlement, Yahoo must create a new “Premium” ad placement option that will only show ads on Yahoo-owned web sites and other select parts of the content distribution network. This specifically excludes parked domain names:

It’s painful to see parked domain names being lumped together with spam emails.

Smart pay-per-click advertisers know how to manage the content network to get a high ROI. But lazy ones — and those that don’t have much knowledge of the network — will likely opt in to only showing their ads on Premium Providers.

Internet publishers should always be required to provide information to online advertisers as to placement; however, since this is unlikely to be provided in the bulk of the cases, it is up to web and mobile advertisers to negotiate ad placement in their online advertising contracts. Too many advertisers get into Pay Per Click (PPC) deals with little understanding of where their ads will appear. While I agree that this settlement is an embarrassment to most lawyers, it may serve to push internet publishers for more disclosure. — by Online advertising lawyer — link removed

I believe Miva.com, previously called findwhat.com also suffered a class action suit similar to yahoo. Apparently, I just received info about the yahoo class action in my email today, because I have had an account going all the way back to Overture and GoTo.com.

What I found out, is “Content Match” is a gross waste of your advertising expenditure!

Most of those clicks are RUBBISH!! The same can be said on Google and I would not be surprised if Google soon face the same sort of class action suit anytime soon. The fact is, the bulk of content match simply does not amount to anything, because those clicks are impulsive with no real intent whatsoever.

However, when a user searches on the Yahoo or Google platform, there is an “immediate intent” to either buy or interact with your PPC ads. I generated over 40,000 personal loan applications for Citi Bank’s affiliate program during the Goto.com years and I know the quality of clicks and where they came from.

Once you induce content match, your expenditure amounts to nothing!

My advise, do not waste your hard money on content match…switch it off immediately if you want real customers, instead of blanks!

Robert – if you just turn a campaign on auto pilot, then sure, it won’t always work well. But if you know how to manage campaigns you can get a lot out of it. Here’s just one of my case studies, where parked domains outperformed search.

Some may say Yahoo is driving the final nail in their own coffin with misguided strategies such as these. The only saving grace may be one of semantics. Yahoo probably knows that domain names provide “high quality traffic”. We all know this. Even typo domains provide higher quality than all but goog-to-yahoo arbitrage. And GOOG makes that type of arbitrage untenable through the semantics of their ad purchasing platform. This is known by all but the dumbest and the meanest on the web. So either YHOO is shaping domain traffic into their “premium channel” with statements like: “including any microsite” with domain names being a microsite; or they are dooming their traffic syndication channel to a pile of garbitrage and exit-crap. The painful truth is that domain traffic is the best on the web because it is disposable traffic, in the sense that it does not rely on content foor return visits. You can point it at-will. Yahoo know this. Google wants to control it. They’d both love to kill it, but they just cant. There will be another comer foor monetization, shortly.

The problem is, if a person in the domain community will not develop the next Google, I don’t believe you can just win over the market. Most ideas have already been done, PPC, CPV, CPA, etc.

Google has I believe over 1 million advertisers. You bring me a new comer that gets 1 million advertisers spending as much as Google, and gives us an EVEN BETTER deal than Google, and then I’ll say you are correct. Until then, it just ain’t going to happen.

I am sorry but when a paid link is placed on a parked / squat site I consider this click fraud.

Then again it appears some of you folks don’t understand what a visitor truly is, and come to think of it, when you speak of disposable traffic and return visitors in the same sentence, maybe it’s not even all Yahoo’s fault.

Yeah, maybe some advertisers snuck in there.

But stand up for them now by talking big, hear?
Yeah, just when it comes time to pay, make sure you’re nowhere near that courthouse.